PH takes on $1.5B ADB loan to cushion Filipinos from Middle East crisis

ADB financing will support fuel, fare, food and fertilizer subsidies as the government tries to shield households from rising costs.

A conflict in the Middle East can seem far removed from the daily expenses of Filipino families. But when it pushes up the price of oil and fertilizer, the impact can eventually show up at the gas pump, in transport costs and at the grocery.

The Philippine government is now getting $1.5 billion in financing from the Asian Development Bank (ADB) to help cushion that impact.

The ADB said Thursday it approved the financing to support the government’s Unified Package for Livelihoods, Industry, Food, and Transport (UPLIFT), which includes fuel and fertilizer subsidies, fare discounts and assistance for provincial and small electric cooperatives.

The program will also provide cash and medical assistance to poor and vulnerable households, public transport operators and drivers, farmers and fisherfolk, while helping keep food, medicines, power and health services affordable.

That could provide some relief at a time when the Philippines is particularly exposed to higher global energy and agricultural costs. The country imports almost all its fuel and relies heavily on imported fertilizers. Oil accounts for about a third of its primary energy supply and comes largely from the Middle East, the ADB said.

But that money isn’t free. It’s still borrowed money that Filipinos will eventually have to pay for.

That is why the government needs to make sure this $1.5 billion does what it is supposed to do. The crisis may be halfway around the world, but if we are going to borrow a huge amount of money to cushion Filipinos from a crisis they did not create, the money should deliver as much relief as possible before the repayment bill comes due.

READ: